BofA lifts its forecasts for euro area growth, inflation
- Forecasts 4.8% growth in 2021 (previously 4.2%)
- Forecasts 3.7% growth in 2022 (previously 3.5%)
- Forecasts 2.2% inflation in 2021 (previously 2.0%)
- Forecasts 1.7% inflation in 2022 (previously 1.5%)
- Sees PEPP programme ending in March 2022, expects €40-50 billion in APP purchases for 12 months
The euro area economy has shown quite significant resilience through the summer and although growth conditions may have peaked, it looks like Q3 may see a rather strong expansion still at least based on the current outlook.
As for the ECB and the PEPP programme, it is very much expected to see that run its course until expiry in March next year. That said, one can expect the central bank to ease the pace of purchases over the next few months.
